Accounting firms resisting the transition to automating manual processes are potentially damaging their profit margins, according to Becki Roberts, national head of cloud accounting at UHY Hacker Young.
Roberts says adopting automation technologies can be beneficial to practices bottom lines, as they free up accountants from repetitive activities to tackle value-added tasks.
Anywhere where were doing things over and over again, theres an opportunity for some of that human element to be taken out of it, she explains.
Then theres your bottom line. If youre paying qualified, intelligent people to do processes that they dont need to be doing, thats going to have a massive impact on your profit.
Roberts adds that the manual completion of repetitive tasks can be attritional for staff, and that this can negatively impact retention.
The ICAEWs head of data analytics and technology, Ian Pay, agrees, noting that automation is now vital to success in the modern accounting sector.
Were rapidly entering an evolve or die world when it comes to embracing tech and automation its brutal but its true, he argues.
That demise could come in the form of pricing yourself out of the market through labour-intensive processes, or losing clients who move to firms who can deliver more from their relationship, as their staff are freed up to engage in meaningful conversations.
But according to Jamie Lyon, head of skills, sectors and technology at the ACCA, there are barriers to the adoption of automation technologies.
Many finance teams are still undertaking proof-of-concepts around automation, bringing in automation or process experts to identify synergies and efficiencies.
The drive for finance teams in automation has to be on process efficiency but also data quality, balanced with cost-effectiveness.
Another critical element of automation for firms is people who understand the inner workings of the business, Lyon says.
I think sometimes its a combination of [utilising] internal and external resources.
Lyon adds that with the exception of some mining techniques, automation products seem not to have evolved too far but ICEAWs Pay disagrees.
While ICAEWs data analytics lead acknowledges the deterrent that the initial cost of adoption poses, he says there are plenty of options out there if you know where to look.
Maybe you have a monthly process which involves combining multiple data files into a single report. These are [areas] where workflow tools might be beneficial.
While common generic automation tools like UIPath and Alteryx often get raised at this point, one very important thing to note is that the Microsoft 365 suite includes Power Automate.
This can deliver robotic process automation (RPA) and workflow-based automation without necessarily having to invest in additional software, Pay adds, noting that its worth exploring.
Theoretically, the deployment of RPA to process high-volume transactions more efficiently, accounting firms are potentially able to reduce costs and accelerate service delivery to attract more clients.
A 2018 Deloitte report went further, saying that RPA adopters also stand to benefit from increased risk intelligence something UHYs Roberts says is now starting to play out in practice.
Where historically youd have a person looking down a huge list of transactions to try and pull out something that looks funny, the tech now exists that you can get robots to do it, she says.
If were using this technology, were reducing the risk. Were increasing the accuracy of what were doing. We can use it across departments, where were looking at identifying transactions that are unusual.
Lyon concurs that such automation processes support more effective decision making, but says the automation agenda must also be part of a broader transformation.
Finance must continue to transition to agile delivery, particularly given the multitude of challenges finance teams face, and the speed of business change..
I think thats the true value of process efficiency and automation. Its an enabler for finance teams to deliver on the higher value agenda in what is a very fluid environment.
When it comes to adopting RPA or other advanced workflow tools, the ICAEWs Pay says many firms lack the headspace and capacity to bring in analysts to identify automation opportunities.
He also suggests that bringing in someone from outside may not always be the best approach unless they can work hand-in-hand with the teams who are likely to be most familiar with the most time-consuming and labour-intensive manual processes.
Becky Shields, a partner at mid-tier firm Moore Kingston Smith, strikes a similarly cautious tone on where automation is best applied in accounting.
She says that, before introducing a new piece of technology into accountants workflows, firms should first analyse the inefficiencies in the process theyre changing.
If there is no issue with the process but it is manual, the logical next step is to look at the technology.
We use design thinking to structure these sessions to help stakeholders think more laterally about what the solution should be and not simply default to deploying a new piece of tech.
Once the ideal process is mapped out, then you begin an innovation scan to see what technology exists that can do some of the heavy lifting, Shields adds.As well as weighing up the cost and efficacy of adopting automation technologies, UHYs Roberts says such practices also need to consider how to win over hearts and minds.
A lot of what accountants do is recurring work, in which a process is carried out quarterly, monthly or annually, he explains.
With this in mind, Roberts says some sort of automation[]makes sense but as accountants are fairly risk-averse people, the fact that they dont really like change is also a barrier to adopting potential solutions.
As accountants, its very easy for us to fall into how weve always done things, he concludes.
We like processes, we follow processes. Its quite easy to get stuck in. Thats the way weve always done it, it works. So why do we need to change?
Well, weve only got two hands and one brain. [Without automation], youre not financially in a position to recruit. You cant take on any more clients and cant physically be doing any more work, so youre potentially missing some opportunities.
See more here:
Accounting firms stunting their own growth through lack of automation - Accountancy Age
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